Agricultural equipment works on a prayer in Kazakhstan: Minister 22 мая 2012, 17:47
- Found a bug?
- Select it and press Ctrl + Enter
Tractor Т-40А made in 1973. Photo by Silver Kuik
Kazakhstan Minister of Agriculture told the senators about the mess in the industry and complained about insufficient funding, Tengrinews.kz reports.
“Our vehicle and tractor fleets have been worn out for a long time already. There is almost no replacement going on and we still sow and till mainly using Soviet-made tractors and harvesters. We are talking about water-saving technologies, whereas we have purchased only 2.5 thousand sowing complexes so far. Based on the average load per season of 2 thousand hectares, one can calculate that only 5 million hectares are currently harvested by modern equipment. Old Niva cars and K-700 are working the rest of the lands (over 10 million hectares). All this equipment has become worn out long time ago and works on a prayer. I don’t know how much longer it will be operational. No replacements or repairs are taking place,” Mamytbekov said at the meeting with the Senate on financing to agriculture.
“There is a big problem in financing of this industry and we see a solution in creation of a fund to issue guarantee and introduction of a government-sponsored loan-insurance system for agriculture. Instead of the small subsidies that the state currently gives ($2-3 for one hectare of grain), we can use these money to subsiding leasing interest rate and then would enable private companies to obtain loans. They can obtain loans now, but at 15-18 percent. In 7-8 years when the loan is paid off the tractor will end up three times more expensive that it actually is. Of course, farmers can count and they are not use the existing system and they are right in doing so,” Agriculture Minister said.
“We need to subside small companies, private financial institutes, as there are only 4-5 billion tenge ($27-33 million) in KazAgroFinance’s budget. This year they have only 4 billion tenge ($26.5 million). This is too small a sum to made any difference in our great needs: the annual need for funding is estimated at $1 billion, which equals to 150 billion tenge. The state budget cannot give KazAgroFinance 150 billion tenge every year, but we can subside 7-8 percent of these 150 billion tenge. This is around 10 billion tenge ($68 million). It is possible to allocate 10 billion tenge from the budget, but the subsidies fund would have to be added into the pool as well,” he said.
By Renat Tashkinbayev